After Pakoda and Chaai, Jayant Sinha's new job-growth metric is Ola Uber Meru and cab-drivers

Last Updated: Fri, Mar 09, 2018 22:43 hrs
Jayant Sinha

First came Prime Minister Narendra Modi's statement in an interview with Zee News on January 19th 2018.

"If someone opens a 'pakoda' shop in front of your office, does that not count as employment? The person's daily earning of Rs 200 will never come into any books or accounts. The truth is huge number of people are being employed..."

Then came Jayant Sinha, Minister of State for Civil Aviation's statement at an India Today Conclave on 9th March 2018.

"Ola and Uber have given employment to 10 lakh drivers. So, I would say it is not about the missing jobs..it is about the missing data..."

Both statements speak about jobs, development and both made their observations, based on a study of provident fund accounts. This PF study by Pulak Ghosh, Professor with IIM-Bangalore, and Soumya Kanti Ghosh (unrelated with each other), Chief Economic Adviser with the State Bank of India was severely criticised. The researchers observed from EPFO data that 7 million jobs will be added to the formal economy by 2017-18.

Critics say:

  • EPFO data only covered organisations with over 20 jobs. Ghosh's survey was based on EPFO accounts. Companies that could add merely one additional job can be qualified for an EPFO account.
  • Validity of data is questionable since only 50 million of the 170 million EPFO accounts were active.
  • Contrast this with the International Labour Organisation's (ILO) grim forecast- 77% of workers in India will have vulnerable employment by 2019. The ILO also says India will add 18.9 million unemployed people or 9.76% to the global population.

In comparison to Pakoda, a plate of which could start from Rs 5, cab-hailing apps are usually expensive. Tales of Ola, Uber and Meru cab drivers earning lakhs have been reported in various Whatsapp Forwards, and Quora reports.

A story in Factordaily quotes a driver. To make Rs 90,000 a month, one had to work 20 hours. Read the story here

A RedSeer consulting data suggests salaries of Ola and Uber drivers dropped 33% during September 2017. Ola and Uber’s revision in subsidies and incentives has impacted drivers who have taken loans to buy cars. Salaries according to unverified reports have come down from Rs 50,000 per month to Rs 15,000.

In the US market, wages and salaries of Uber and Lyft drivers (another service) have tapered. A study by MIT suggests that Uber and Lyft drivers were paid less than the minimum wage. Dara Khosrowshahi, Uber's CEO, and the Uber board dispute the findings of this study, but drivers have been quoted in various media reports of utilising various ways and means of making ends meet. A story in the Business Insider says Uber and Lyft drivers were forced to sell candy and snacks in their cars.

To quote Ola, Uber, Meru drivers, or rickshaw-drivers hence is building on hype rather than an academic study.


Garama Garam Chaai and Pakoda to replace Engineering and Doctory
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MISSING JOBS

Data from the 5th Annual Employment-Unemployment Survey, 2015-16, shows that with rising education levels, the unemployment rate has also gone up in the age group of 18-29 years. The report has been compiled by the Ministry of Skill Development and Entrepreneurship.

"The unemployment rate for persons aged 18-29 years and holding a degree in graduation and above was found to be maximum with 18.4 per cent based on the Usual Principal Status Approach at the all-India level," said the Survey report on Youth Employment-Unemployment Scenario, Volume II. The unemployment rate for the age group at the all-India level was estimated at 13.2 per cent. The Survey's Volume I suggested that the unemployment rate was estimated to be five per cent at the all-India level.

But Sinha believes that the shortfall in this data is covered by Ola and Uber drivers.

He said, "Ola and Uber have given employment to 10 lakh drivers. So, I would say it is not about the missing jobs...it is about the missing data."

Growth? Possible?

Sinha was joined in the discussion with Uday Kotak, MD of Kotak Bank, Arvind Panagriya, former vice-Chairman of Niti Aayog, Sachin Pilot of the Congress, and Mohan Guruswamy, Chairman of the Center for Policy Alternatives Society. All offered contrasting views on the jobs market.

Panagriya said talks of jobless growth were nonsense. "We have a problem of good jobs versus a job, underemployment is a problem."

Sachin Pilot shared that people in the country found themselves either underemployed or unemployed. In a story published on Indiatoday.in, he was quoted saying, "Iss sarkar ne chai pila diya, pakoda khila diya, shochalaya dila diya, bas naukri nahi mil rahi."

(We have had tea, pakoda, toilets, but not jobs)

Kotak said sectors like education, healthcare and security services had immense scope for job creation. "There is a need to look at jobs not just for salaries but for driving self-employment," he added

Guruswamy, said that the economy could get only sectoral development, and not jobs, when it 9% of budget is spent on capital expenditure.


Paradise papers links 714 Indians. Read about it here.

Positives

The only note-worthy contentions Sinha makes is that on the situation and a new economy.

"Job situation is not as bad as it is being made out to be," he said.

He also added "There is a tremendous upsurge in job creation, not in the traditional economy but in the new economy, in entrepreneurship."

Here are a handful of tweets:

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